The Case of Spatial Planning and Coastal Flood Protection in the Netherlands
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20/01/2014 Costs and benefits of adapting to climate change - the case of spatial planning and coastal flood protection in the Netherlands Karianne de Bruin Senior Research Fellow – CICERO NZCCRI Seminar Series Friday 6th December 2013 Multi‐criteria analysis Cost‐benefit analysis Iterative risk Cost‐ (adaptive) effectiveness management Robust Decision support tools analysis decision Decision support making tools Portfolio analysis Real options analysis Spatial planning Coastal protection 1 20/01/2014 Multi‐criteria analysis Cost‐benefit analysis Iterative risk Cost‐ (adaptive) effectiveness Robust management analysis Decision decision support making tools Portfolio analysis Real options analysis Multi‐criteria Cost‐ analysis benefit analysis Iterative risk Cost‐ (adaptive) effectiveness Robust management analysis Decision decision support making tools Portfolio analysis Real options Realanalysis options 2 20/01/2014 Climate change Adaptation Uncertainty Evaluation methods Source: de Bruin (2011) Adaptation decision - Whether to adapt? - What to adapt? - How much to adapt? - When to adapt? 3 20/01/2014 Cost-benefit analysis Urgency Feasibility Costs … 321€€€ 5 55€ 43€5 … Cost-benefit analysis Critical points - Data requirement - Types of costs and benefits - Discounting - Uncertainty 4 20/01/2014 Uncertainties Physical effects of climate change Economic - Costs and benefits of adaptation options - Irreversibility & flexibility Policy - Time horizon of decision-makers - Feasibility 5 20/01/2014 Cost-benefit analysis - Plus Urgency Feasibility Costs … 32€€€ 5 5 € 43 € … Spatial planning Photo: Karianne de Bruin 6 20/01/2014 Context Source: Rijkswaterstaat Costs and benefits Costs: Investment costs and maintenance costs Primary benefits correspond to the objective of the adaptation measures – avoided direct damage Secondary benefits which result from the adaptation but are not its primary objective 7 20/01/2014 Zuidplaspolder Based on Melmer, J. (Hoogheemraadschap Schieland en de Krimpenerwaard) Spatial planning ZPP - Dutch policy makers selected the ZPP for urban developments, focused on new residential, commercial and further agricultural development (greenhouse horticulture) - Province + NGOs + municipalities + water authority made a master plan for the spatial development - Hotspot Zuidplaspolder project 8 20/01/2014 Climate change impacts Flooding from river discharge - Failure probability of the flood defence - Simulated water flow in the ZPP - Potential economic damage Excessive precipitation - Frequency inundation extreme rainfall event - Model local water levels - Damage caused by inundation Zuidplaspolder Based on Melmer, J. (Hoogheemraadschap Schieland en de Krimpenerwaard) 9 20/01/2014 Zuidplaspolder Based on Melmer, J. (Hoogheemraadschap Schieland en de Krimpenerwaard) Options 1. Water storage for housing and greenhouse development in the northern part of the ZPP 2. Climate robust ecological network (entire area of the ZPP) 3. Climate robust design of a residential area of Nieuwerkerk Noord 4. Climate robust design of a residential area of Moordrecht 10 20/01/2014 Source: de Bruin et al. (2013) Reference situation 0-alternative: reference situation for the polder area based on the current master plan for the spatial development of the ZPP, but without additional adaptation measures 11 20/01/2014 Quantified costs and benefits - Investment costs - Maintenance costs - Avoided damages - Effects on nature, landscape and water values associated with alternative land use types (WTP per year additional municipal tax) Net present value (million €) Adaptation option Discount rate 2.5% Declining 4% Water storage Zuidplas Noord -17.2 -19.6 -22.8 Ecological network entire polder 59.7 50.34 37.7 Climate robust design Nieuwerkerk Noord -17.81 -18.39 -19.3 Climate robust design Moordrecht Noord -19.55 -19.62 -19.72 Adaptation strategy (sum of all options) 5.14 -7.27 -24.12 12 20/01/2014 Lessons learned - Sensitivity of NPV results; time horizon, long-term costs and benefits and the discount rate - Inclusion of primary and secondary benefits - Awareness of underlying assumptions and sensitivity of results - ‘What-if’ setting Follow-up Source: Xplorelab Hotspot Zuidplaspolder - Xplorelab The Dutch government granted 24 million € for the implementation of sustainable and climate proof pilots in the Zuidplaspolder 13 20/01/2014 Coastal flood protection Photo: Karianne de Bruin Coastal flood protection Context: flood protection, safety standards, climate change, stakeholders Uncertainty: Sea-level rise, timing of resolution of uncertainty Decision makers: Coastal managers 14 20/01/2014 Decision support Evaluation of local coastal adaptation options Assess how climate change uncertainty affects the decision to invest in coastal flood protection How the incorporation of stakeholder perceptions changes the optimal investment decision Local coastal adaptation Optimal coastal protection under climate change uncertainty for a Dutch coastal area. 15 20/01/2014 Local coastal adaptation Current protection ? Sea level rise + + + WB21 midden scenario (zeespiegelstijging inclusief bodemdaling) Source: KNMI (2009) 16 20/01/2014 Investment model An investment model is developed that simulates optimal decision-making in coastal flood protection, incorporating flexible timing of investment in coastal adaptation to uncertain climate-induced sea-level rise. Local coastal options NonStructural‐structural Focus on investment in structural and/or non-structural coastal adaptation options. 17 20/01/2014 Investment model Two decision moments: - Investment decision (t=0) - Adjustment of investment decision (t=k) Two random variables - Climate change uncertainty - Resolution of uncertainty Decision tree Source: de Bruin (2011) 18 20/01/2014 Costs and benefits (1) Preliminary costs of coastal flood protection measures based on ARCADIS (2010) (1000€) Non-structural Structural Costs Fixed investment cost 29458 38230 Annual Cost 48 36 Maximum additional annual flood damage with 1.0m climate induced sea-level rise is 1 400 000 € (Based on Deltares (2010)) ARCADIS (2010). MKBA Kustversterking Katwijk. (In English: Social Cost-Benet Analysis of coastal flood protection in Katwijk). ARCADIS, Rotterdam, the Netherlands. Deltares (2010). Overstromingsrisico en droogte in een veranderend klimaat, verkenning van wegen naar een klimaatveranderingsbestendig Nederland (In English: Flood risks and droughts in a changing climate, exploring roads towards a climate proof Netherlands). Deltares, Delft, the Netherlands. Perceptions Stakeholder perceptions are identified through workshops to gain insight into stakeholders’ attitude towards uncertain future impacts of climate change coastal flood protection Photo: Karianne de Bruin 19 20/01/2014 Perceptions Indirect stakeholders - Current safety standard - Flexibility of option - Robust for future climate change Direct stakeholders - Impact on tourism sector - Spatial quality - Parking issue Costs and benefits (2) Preliminary costs of coastal flood protection measures based on ARCADIS (2010) (1000€) Non-structural Structural Costs Fixed investment cost 29458 38230 Annual Cost 48 36 Cost tourism sector during implementation 473 473 Annual negative costs (benefits) Tourism revenues -620 -1250 Extra nature (per ha) -45 -29 ARCADIS (2010). MKBA Kustversterking Katwijk. (In English: Social Cost-Benet Analysis of coastal flood protection in Katwijk). ARCADIS, Rotterdam, the Netherlands. 20 20/01/2014 Results Optimal initial investment decision depends on the expected waiting time for the resolution of uncertainty, the discount rate, the cost structure of the measures and the inclusion of start-up costs, and tourism and nature benefits (ancillary benefits) Initial investment decision in structural and non-structural coastal adaptation measures (a) Structural (b) Non‐structural Source: de Bruin (2011) 21 20/01/2014 Follow-up www.kustversterkingkatwijk.nl Thank you for your attention Contact details: [email protected] 22 20/01/2014 References - De Bruin, K., H. Goosen, R. Groeneveld and E.C. van Ierland (2013). Costs and benefits of adapting spatial planning to climate change: lessons learned from a large-scale urban development project in the Netherlands. Regional Environmental Change - published online (doi: 10.1007/s10113-013-0447-1) - De Bruin, K. and E. Ansink (2011). Investment in flood protection measures under climate change uncertainty. Climate Change Economics 2(4): 321-339 (doi: 10.1142/S2010007811000334) - De Bruin, K. (2011). An economic analysis of adaptation to climate change under uncertainty. PhD thesis Wageningen University (http://edepot.wur.nl/182256) Contact details: [email protected] 23.